Project Risks are Real – Plan for Them

Are you managing risk? Too many project managers and project customers push to avoid or omit risk planning and management as too time consuming and too costly. “We'll just cover it as issues if anything comes up...and it probably won't.” Wrong. Risk needs attention...risk management IS important.

There are many approaches that can be used to address risk and the threats it produces. It doesn't have to be overly time consuming or incredibly difficult. Or even that detailed and certainly not that costly.

The key is to use whatever works and what you and your team and your customer will actually do. And then DO IT. Ignoring risks doesn’t mean they won’t happen. It just means you’re likely to spend your extra time in the unemployment line.

However you go about your process of risk management, remember that no matter how you go about it, you’re likely going to need to include some variation of this basic four-step approach:

Risk identification. Risk identification is the process of determining what threats exist. You and your team – along with the customer’s assistance, if possible - should identify all significant uncertainties (sources of risk), including specific threats (also called potential problems or risk events) that could occur throughout the life of the project.

Risk quantification. Risk quantification is the process of determining how big the threats are. During risk quantification, you and your team must obtain information on the range of possible outcomes for all uncertainties and their distribution and/or probabilities of occurrence. This way, you’ll be in a better position to understand the nature of the threats and their potential effects on the project.

Risk analysis. Risk analysis is the process of determining which threats are of greatest concern. During risk analysis, you’ll use the knowledge you and your team gained through risk assessment to determine which potential problems represent the greatest danger to achieving a successful and predictable project outcome. Usually, this is done by considering the probability that a specific problem will occur and its anticipated impact on the project.

Risk response. Finally, risk response is the process of actually dealing with the risks or threats to project success. You and your team must work to determine the best approaches for addressing each high-threat potential problem. This risk response plan may include evaluating and choosing among a number of alternatives, and creating specific action plans to follow for each specific potential risk.

Summary

By putting meaningful time into identifying potential risks and planning for their mitigation – or even avoidance – you’ll not only be giving your project it’s best chance of success, you’ll also be setting the course for good project planning throughout the engagement. Your confidence, your teams’ confidence, and your customers’ confidence will be greatly enhanced by going through this process because you’ll know that you already have plans in place to deal with these potential threats.

How about our readers? Are you dedicated to including risk management in every project or do you find it to be one of those difficult add-on project planning processes that sometimes just doesn't happen?